University rentals in an undesirable area

5 Replies

A university in my area plans to increase the number of undergrads exponentially in the next 3 yrs.  I'm considering purchasing SFHs in that area to rent to students bc I know student loans/funding/co-signers are able to pay great rents (much higher than typical in that neighborhood yet much lower than on-campus options). However, I'm concerned about students being hesitant to rent off-campus due to the undesirable surrounding area  and safety issues (Picture USC for instance. Despite the phenomenal university, the surrounding residential area has failed to thrive or make students feel secure) AND I'm concerned about renting to less-than-ideal renters if forced to rent to non-students. What do you think? Is this a great opportunity or too risky?? Appreciate the feedback. Thank you!

My own thought is I wouldn't buy there on the bet that it will improve when the university expands. That fact gives the area the potential of substantial appreciation, which is a great upside, but with my own strategy, that's not enough by itself. The question I would ask is, would owning properties there still work and be profitable if it doesn't improve? If the answer is yes, and there's the potential for it improve dramatically, then I would pull the trigger.

I'm with you @Briana W. and USC is a prime example of the issue (raised in the Beach Cities).

The approach is ok, but the location DOES MATTER.

Hi Andrew, Thanks so much for your feedback! The opportunity I see isn't in appreciation in the area, it's in the sudden need for much more student housing due to the goal of the university to expand so quickly. I need to research how many on-campus units the school is building and see if they will have the construction complete before the influx of new students.

I agree that the numbers would need to work with the non-student population too. I'll do more research. Thank you!

I'm with you @Briana W. and USC is a prime example of the issue (raised in the Beach Cities).

The approach is ok, but the location DOES MATTER.

Hey @Briana W. thanks for initiating this thread. Interesting topic. I have a few thoughts I'd like to discuss with you when I touch base in Phoenix/Scottsdale in April. I sent you a PM and colleague request. Cheers, Ken 

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